There are two main ways that a person can purchase or sell their cryptocurrency, and that is either through a broker or through a crypto exchange. We are going to cover everything you need to know about crypto broker vs exchange in order to help you make a decision on which one is the better option for you.
What is a crypto broker?
Generally speaking, crypto brokers are individuals or firms that act as financial intermediaries for people that wish to exchange their crypto currency for a different one of for money. Usually, they would charge some kind of premium for the use of their platform.
It is safe to say that for larger amounts of money, crypto brokers are a much better option, as it is much safer to trade tour currency through them than through a crypto exchange platform. Of course, this does come at a certain fee, but it is better to make sure that the transaction is safe and legit than to turn into a scam where you will never see your money again.
There are various cryptocurrency brokers on the internet such as Bitpanda for example. They are the best option for beginners, as you can very easily and safely purchase some Bitcoin, Litecoin, Ethereum, and whichever other cryptocurrency you might be interested in.
If you wish to exchange with another user on the platform, the exchange takes place between not only the two users, but also the platform itself in order to ensure a safe transaction. You can also exchange fiat currencies this way for a cryptocurrency whether you are using Euro, USD, GPB, or whichever fiat currency.
What is a cryptocurrency exchange?
If you do not wish to use a broker platform and instead use a crypto exchange platform, you will be able to trade directly with other users without the third party being involved(the third party being the broker). Of course, you will still get charged a small fee for using the platform, but due to the environment being less safe overall and based on more or fewer gentlemen’s agreement, it is not that big of a fee.
The fee usually involves mainly paying for the conversion fee since you will probably be trading one cryptocurrency into another one, or fiat currency into a cryptocurrency. In general, exchanging money on a crypto exchange is better for smaller amounts of money or NFT stocks.
Crypto broker VS Exchange: The main differences
So, now that we know what each individual method does and is for, let us talk about the main differences between the two in order to help you make your decision of which one to use even further. By using exchange, a person can only use the currency that they have to exchange it for whatever they want, and then they can exchange that for whatever they want, it is basically the traditional way of trading, great for small amounts of money.
Crypto brokers on the other hand allow their users to use whatever the broker’s account has available for deposits and trades, initially skipping various steps of having to do multiple trades in order to get a certain currency to do a certain deal. This is why using crypto brokers for crypto moons is suggested.
Brokers will essentially seek out the best person for your transaction so you can each get the currency you are looking for. In most cases, the brokers are usually the ones who will be the best person and no other person will be involved.
By involving a crypto broker, you will be able to have some opportunities such as leverage positions for example if the broker happens to have a need for your currency to pull off transaction with a different person on their platform.
Crypto exchange, on the other hand, leaves you alone in this story, and you will have to seek out buyers for your crypto currency if you want to sell it, or wait someone to contact you on the crypto platform instead.
Registering for both is usually different. Since brokers tend to be more official and since they operate on a safer level, you can expect registrations and transactions to be more complex. In some cases, you might even have to do a video call.
Crypto exchange on the other hand depends on the platform that you are using, and in most cases, the registration will require your ID, proof of home address, and such, but it will not be as rigorous as registering on the crypto broker’s platform.